TMI Blog2021 (4) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed by the Tribunal - the tax case is dismissed and the questions of law are answered against the revenue. - Tax Case No.10 of 2019 - - - Dated:- 31-3-2021 - Honourable Mr.Justice T.S.Sivagnanam And Honourable Ms.Justice R.N.Manjula For the Petitioner : Mr.R.Swarnavel Government Advocate (Tax) For the Respondent : Ms.Aparna Nandakumar ORDER T.S.SIVAGNANAM ,J This tax case filed under Section 20 of the Central Sales Tax Act, 1956 [hereinafter referred to as the CST Act ] by the State/revenue is directed against the order dated 24.04.2017 passed by the Sales Tax Appellate Tribunal [Main Bench], Chennai in S.T.A.No.78 of 2014 for the assessment year 2006-07. 2.The respondent is a registered dealer on the file of the Commercial Tax Officer, Alwarpet Assessment Circle engaged in dealership of machinery. The respondent was assessed to tax on a total and taxable turnover of ₹ 56,92,95,547/- and ₹ 4,06,25,012.00 under the CST Act. The Assessing Officer after verification of the records issued notice to the dealer that they have been given exemption on a turnover of ₹ 42,98,11,261.00 as transit sales covered under 'C' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 5.2% and (2) disallowance of exemption of design engineering at 5.7%. The dealer succeeded before the first appellate authority on both the above grounds and the appeal was partly allowed by order dated 21.10.2013. Aggrieved by such order, the State preferred an appeal to the Tribunal which was dismissed by the impugned order. 5.Challenging the same, the State is before us by way of this tax case raising the following questions of law for consideration: a) Whether the impugned order of the first appellate authority in A.P.No.14/2013 dated 21.10.2013 and the Appellate Tribunal in S.T.A.No.78/2014 dated 24.04.2017 is sustainable in law? b) Whether the order of the Appellate Tribunal in upholding the order of the Appellate Deputy Commissioner (CT) is proper in law? 6.We have elaborately held Mr.R.Swarnavel, learned Government Advocate (Taxes) appearing for the petitioner/revenue and M/s.Aparna Nandakumar, learned counsel appearing for the respondent. 7.The revenue would contend that the Tribunal ought to have noted that the Form C declaration filed by the respondent dealer included tax portion also for the turnovers on which they had claimed exemption and henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly for supervision charges and there is no contract for sale of goods and the invoice amount includes the service tax element and also the cess amount which have been remitted to the Commissionerate and no tax could be levied on pure labour charges. Further, it is submitted that the transit sales claimed by the dealer is eligible for exemption under Section 6(2) of the CST Act and the Assessing Officer had examined the entire set of documents including C Form, E1/E2 Forms and granted exemption claimed by them in the original order dated 27.02.2012. Further as per the contract entered with M/s.NLC, the excise duty, sales tax including service tax and works contract tax wherever applicable was to be reimbursed at actuals subject to ceiling indicated in the schedule of price and therefore the reimbursement of CST at actuals would form part of the contract price. However, the dealer have shown separately in the invoice in order to claim the reimbursement at actuals in keeping with the contractual obligations. Therefore, the entire set of transactions are eligible for exemption under Section 6(2) of the CST Act. 9.The Assessing Officer had disallowed the claim of exemption by relyin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority was tested by the Tribunal. Once again the specimen transaction was examined by the Tribunal and other documents such as lorry receipts, etc. and held that the invoice established beyond doubt that there has been no stoppage of carrier until the road carrier has reached M/s.NLC. After examining Section 6(2) of the CST Act, the Tribunal held that the conditions that are discernible from Section 6(2) of the CST Act are (i) the first sale could be either a section 3(a) or a section 3(b) sale; (ii) the second or subsequent sale has to be a section 3(b) sale; (iii) the subsequent sale has to be a registered dealer; (iv) the goods should be of a description referred to in section 8(3) of the CST Act; (v) the E-1 Form is to be furnished by the seller and (vi) the C-Form obtained from the purchasing registered dealer has also to be furnished by the respondent. 11.After appreciating the facts which were placed by the dealer, the Tribunal held that the conditions specified in Section 6(2) of the CST Act have been satisfied by the dealer and faulted the Assessing Officer for disallowing the claim for exemption only on the ground that the dealer had collected tax whereas he had not reje ..... X X X X Extracts X X X X X X X X Extracts X X X X
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